The European Court of Justice has ruled that the European decision to include in the European ETS carbon emissions generated by non-European aircraft flying to or from Europe is legal. This type of levy is a border “tax” adjustment of the type I have often discussed on this blog. It isn’t a discriminatory levy at all since it merely prevents carbon leakages and competitive disadvantage to European carriers who are subject to the tax. This decision is a very good outcome and effectively rebuts the disgraceful hypocrisy of both China and the United States in seeking to escape this levy. If the levy comes into play then the incentives are for China, the US and other country carriers which fly to China to impose the levy themselves since then they get the revenue not the Europeans. It is precisely this latter effect that makes me such a strong supporter of border tax adjustments – they provide a mechanism for unilateral measures to become more global and that’s what is needed.